Changes to the Government furlough scheme – Is your business ready?

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Changes to the Government furlough scheme – Is your business ready?

Key Changes

  • The last day employers can place employees on furlough is 10 June 2020
  • The scheme closes to new entrants on 30 June 2020 and closes in its entirely on 31 October 2020
  • “Flexible furlough” is available from 1 July 2020 so that employees can work part time and be furloughed part time. Employers will be required to pay the staff for the hours worked and the Government will pick up the rest subject to the usual cap
  • From 1 August 2020 – Employers must pay Employer’s National Insurance Contributions and employer pension contributions for furloughed employees
  • From 1 September 2020 – The Government will reimburse 70% of salary (up to a maximum of £2190). Employers must top up to 80% (up to a maximum of £2500)
  • From 1 October 2020 – The Government will only reimburse 60% of salary (up to maximum of £1875). Employers must top up to 80% (up to a maximum of £2500)

Urgent action employers need to take

What did the original furlough letter say? Review these, as many included a review or end date of 31 May 2020.

  • New furlough letter? Issue new letters setting out the revised terms your business is proposing – you need employee consent to change the terms in any way (such as extending furlough/changing pay)
  • Part time working? Consider whether you wish to use the flexible furlough initiative to bring employees back part time
  • Holiday Entitlement? Decide whether to instruct employees to take holiday during the furlough period
  • Short serving employees? Do you have employees who will gain 2 years service in the coming weeks/months? Consider possible termination (depending on the circumstances and please take legal advice before so doing)
  • Redundancy? Consider affordability of “tops ups” and whether redundancies or restructures are necessary for business survival – plan ahead for this as the process is not quick

If you have any queries on aspect of this, please contact our Employment Team at employment@keebles.com.

(This general guidance is correct as at 1 June 2020 but may be subject to change. We strongly recommend that specific advice is sought as needed).

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